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Overview

Located in the westernmost part of the continent, Senegal is bordered by Mauritania, Mali, Guinea, and Guinea-Bissau. It has a dry, tropical climate and a population of 16.7 million, a quarter of whom live in the Dakar region (0.3% of the territory).

Political situation

Senegal is one of Africa's most stable countries. Since independence in 1960, there have been three peaceful political transitions. President Macky Sall, who has been in power since 2012, was re-elected to a second (five-year) term in February 2019. In July 2023, the president announced that he will not run in the next presidential election set to take place on February 25, 2024.

Senegal's parliamentary elections on July 31, 2022, have created an unprecedented situation, with a national assembly with a narrow majority. The ruling coalition, Benno Bokk Yakaar (United in a common hope), has 83 seats out of the 165 available, with the five opposition coalitions sharing the remaining 82 with Yewwi Askan Wi (Free the people, 56), Wallu (Relieving Senegal, 24), Bok Guiss Guis (united in the same vision, 1), Aar Sénégal (Protecting Senegal, 1) and Les Serviteurs (Serving Senegal, 1).

Economic situation

The COVID-19 pandemic and Ukraine’s invasion by Russia, have caused major terms-of-trade shocks, significantly affecting growth for 2022 and resulting in persistently high budget deficits and debt levels, with limited room for maneuver.

Estimates point to a slowdown in real GDP growth to 4.2% in 2022, compared with the 5.5% forecast prior to the shocks.

Rising food and energy prices, trade disruptions and greater uncertainty have depressed private investment. The same transmission channels have contributed to an inflationary surge since early 2022, which reached its highest level in decades with 14.1% year-on-year recorded in November 2022, followed by a slowdown to 9.4% in February 2023. As a result, average inflation is estimated at 9.6% for 2022, up from 2.2% in 2021, driven by rising food prices averaging 15% for 2022, compared with 2.9% in 2021.

The pandemic has had a significant impact on the country's economic outlook, affecting the service sector, notably tourism and transport, as well as exports. In response, Senegal has implemented various cost-containment measures, as well as an economic and social resilience program (PRES). However, the situation remains challenging due to limited budgetary margins and social safety nets, the vulnerability of the healthcare system and the size of the informal sector.

Economic recovery should be gradual. The reforms set out in the Plan Sénégal Émergent (PSE) must be reinforced to enable growth to return to its pre-pandemic trajectory. Services still account for the majority of GDP growth, while the primary sector (agriculture, in particular) remains the main engine of growth. Oil and gas projects have been postponed due to the health crisis and are not expected to contribute to revenues and exports until 2035.

Development Challenges

The main development challenge will be to boost economic activity to promote sustainable, inclusive growth and strengthen the resilience of populations vulnerable to shocks. It will require to:

  • Improve resilience to macro-fiscal, environmental, climate change, and social risks to safeguard investments in human capital and household livelihoods.
  • Boost and protect human capital for productivity growth,       
  • Enhance competitiveness and job creation by improving digital and physical connectivity at the national and regional levels and increase the efficiency of labor markets.
  • Lower energy costs, reduce the carbon footprint, and optimize the energy mix.
  • Promote the services economy and boost the productivity and competitiveness of agriculture and related value chains.

Social Context

Improved access to key services has led to socio-economic gains. However, rising world commodity prices and the global economic slowdown linked to the ongoing conflict in Ukraine threaten to hamper these gains. This could lead to heavy losses for households through reduced in-work and out-of-work incomes, domestic price inflation, and disruption to provision of essential services.

Last Updated: Sep 26, 2023

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Senegal: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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Additional Resources

Country Office Contacts

Main Office Contact
Corniche Ouest X
Rue Léon Gontran Damas
Dakar, Senegal
+221 33 859 4100
For general information and inquiries
Seydina Djigo
External Affairs Officer
+221 33 859 4100
For project-related issues and complaints